Uzbekistan has tentatively signalled that it wants to open up its economy by
selling off 500 state-owned assets over the next couple of years.

Saifitdlin Gafarov, deputy chairman of the Uzbek state property committee, said the sell-off would cover all Uzbekistan’s key industries from energy to metals, the AP news agency quoted Uzbek media as saying.

This is the second time this year that the Uzbek government has sent out signals that it may be considering improving its economic and foreign investment climate, although there is little hard evidence of action so far.

Uzbekistan, which is the region’s most populous country with around 29.5 million people living in it, is considered key to Central Asia. Any opening into its economy would attract considerable interest from foreign companies.

The Soviets also viewed the country as its transport and administrative hub in Central Asia. They built vast rail links from Uzbekistan to Russia and the rest of the region, a network that Nato hopes to make the most of when it evacuates its military hardware from Afghanistan in 2014.

But since independence from the Soviet Union in 1991, Uzbek President Islam Karimov has operated a closed economy which has made life uncomfortable for foreign companies investing in Uzbekistan and virtually closed the country off from the outside world.

Uzbekistan’s economy appeared to have become so self-sufficient that the global economic crisis of 2008 and 2009 virtually passed it by untouched. Instead, according to official data, the Uzbek economy continued to grow at an average of 8 per cent a year.

The figures might look impressive, but the reality is starker.

Human rights groups rate the Uzbek government as one of the most repressive in the world, clothing companies have boycotted cotton from Uzbekistan because much of its has been picked by child labour and inflation has corroded any nominal economic growth.

This year’s pronouncements by Uzbek officials on opening the country's economy may be a reaction to pressure from multi-national financial organisations. They have been urging the Uzbek government to speed up privatisation to both boost the economy and improve the exposure of ordinary people to cash dripping into the country from energy, gold and cotton exports.